An exchange-traded fund (ETF) is an investment fund that combines multiple underlying assets. It is traded on an exchange like ordinary stocks. However, unlike the stock of a single company, an ETF includes a wide range of assets-such as stocks, bonds, sectors, countries, or even the entire market. Investors use different ETFs to generate income or to reduce portfolio risk.

ETFs are considered efficient and cost-effective investment instruments because their expense ratio is usually low, due to the index-based management model. This allows investors to reduce long-term costs and improve overall investment efficiency.

Main Types of ETFs:
Passive ETFs – Designed to replicate the performance of a specific market index, such as the S&P 500 or sector-specific indices.
Actively Managed ETFs – Do not track an index. Portfolio managers decide which securities to buy and sell. They have higher management fees but may provide additional returns.
Bond ETFs – Aim to provide regular income. They may be based on government, corporate, or municipal bonds. Unlike individual bonds, they do not have a maturity date.
Sector ETFs – Focus on a single sector, such as energy or technology. For example, the iShares U.S. Technology ETF (IYW) tracks the Russell 1000 Technology Index.
Commodity ETFs – Invest in commodities such as gold, oil, and other raw materials.
Currency ETFs – Track currency pairs. They can be used to profit from currency fluctuations or to hedge risks.
Inverse ETFs – Generate profits from market declines without engaging in short selling. They are based on derivative instruments.
In practice, these are ETNs (exchange-traded notes), not true ETFs.
Leveraged ETFs – Aim to deliver a multiple of the underlying asset’s return (e.g., 2× or 3×). They use leverage, options, or futures.

How to Invest in ETFs?
Investing in ETFs through Cube Invest is organized in a simple, convenient, and professional format. You need to open a brokerage account with Cube Broker Pro, which provides access to hundreds of ETFs traded on international financial markets.
To open an account, click here.

Source: https://www.investopedia.com/terms/e/etf.asp